Dec. 7 (Bloomberg) -- The New York Senate voted against legislation to preserve the bankrupt New York City Off-Track Betting Corp., setting the stage for the operation to close at the end of the day.
Shuttering the wagering organization, which operates 50 betting parlors in New York City, would result in the firing of 800 workers and require the state to assume $600 million of payments for pensions and health care, Senator Carl Kruger of Brooklyn said during the vote.
“This puts the racing industry in turmoil,” said OTB Chairman Larry Schwartz. Shutting the business threatens tens of thousands of jobs, may lead to some harness racetracks closing and may force horse breeders to move out of the state, he said at a press conference in Albany, the state capital.
Senator Kenneth LaValle, a Republican from eastern Long Island, cited “other OTBs that need to be taken care of” for his vote against the measure. Republicans favored different legislation that would have helped the five regional off-track betting corporations outside the city.
Schwartz said measures to help those betting operations could have been taken up in January. Those businesses aren’t in bankruptcy, he said.
“We are out of money,” Schwartz said. “We are out of cash. We are out of business.”
OTB operated 68 betting parlors when it filed for Chapter 9 bankruptcy in December 2009. It lost $45 million in the five years before the filing as betting revenue from horse racing fell short of payments owed to tracks, local governments and operating costs.
Passing the rescue package would have allowed racetracks, the biggest creditors, to assume ownership of the profitable Internet and telephone-wagering business, according to a bill proposed by Governor David Paterson. The plan agreed to by creditors would have cut more than 500 jobs, or about half its workforce, Schwartz said.
The plan would have allowed the corporation to pay its own pension obligations of $12 million annually, rather than leaving that cost to other participants in the New York City Employees Retirement System, and to pay health costs of its retired workers, estimated at more than $500 million. The city and state have disagreed about who would be liable for the health-care payments, according to the description attached to the legislation.
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